Monday, 7 May 2012

KLCI falls at mid-morning, blue chips weigh

KUALA LUMPUR (May 7): The FBM KLCI fell at mid-morning on Monday, in line with some of it key regional peers, on concerns about the impact of weekend elections in France and Greece on the euro zone debt crisis and weaker-than-expected U.S. jobs data.

The FBM KLCI fell 7.30 points to 1,583.74 at 10am, weighed by losses at blue chips.

Loers led gainers by 270 to 108, while 212 counters traded unchanged. Volume was 21.52 millionshares valued at RM117.40 million.

Risk assets fell broadly on Monday after elections in Greece and France fuelled questions about whether struggling euro zone economies will continue to pursue austerity measures which are seen by markets as crucial to resolving the bloc's debt crisis, according to Reuters.

BIMB Securities Research said heightened volatility ahead for global equity markets was over expectation from analysts and economists alike are beginning to scupper sentiments.

It said in a note on Monday that despite the net adds in the US job data, the figure was broadly lower than forecasted thus the sell down on Wall Street with the Dow Jones Industrial Average losing 168 points to close at just above the 13,000 mark.

In Europe, equities all ended lower as there were mixed reaction to the new administration in France following Hollande’s victory in the French election, it said.

“With this new “establishment”, investors are concern if Europe’s bailout process would be derailed. Meanwhile, Asian bourses ended mostly lower on weaker opening in Europe.

“Locally, the FBM KLCI continues to astound us with another 7.87 point addition to 1,591 on some late buying on blue chips. Nonetheless, we remain unconvinced of the market’s undertone and advise investors to sell into strength,” it said.